Normal skeletal growth results from a balance between the processes of bone matrix synthesis and resorption. These activities are regulated by both systemic and local factors. Bone turnover is dynamic, and skeletal growth must be maintained throughout life. Although many growth promoters are associated with bone matrix, it is enriched particularly with transforming growth factor beta (TGF-beta) activity. Experimental evidence indicates that TGF-beta regulates replication and differentiation of mesenchymal precursor cells, chondrocytes, osteoblasts, and osteoclasts. Recent studies further suggest that TGF-beta activity in skeletal tissue may be controlled at multiple levels by other local and systemic agents. Consequently, the intricate mechanisms by which TGF-beta regulates bone formation are likely to be fundamental to understanding the processes of skeletal growth during development, maintenance of bone mass in adult life, and healing subsequent to bone fracture.